TOKYO, Dec 12 (Reuters) – Benchmark Tokyo rubber futures surged to their highest in nearly three years on Monday, as stronger oil prices following a deal by global producers to cut crude output, and a jump in Shanghai futures prompted a flurry of buying. Oil prices shot to their highest levels since mid-2015 after OPEC and other producers reached their first deal since 2001 to jointly reduce output in order to rein in oversupply and prop up markets.
O/R “Tokyo followed the Shanghai market which soared by speculative buying after an agreement was made between OPEC and non-OPEC producers over the weekend,” said Toshitaka Tazawa, an analyst with Fujitomi Co. The Tokyo Commodity Exchange (TOCOM) rubber contract for May delivery JRUc6 0#2JRU: closed up 10.6 yen, or 4.4 percent, at 256.0 yen ($2.21) per kg, after touching the highest since January 16, 2014 of 258.8 yen earlier in the session. The most-active rubber contract on the Shanghai futures exchange for May delivery SNRcv1 jumped 680 yuan to finish at 19,345 yuan ($2,797.34) per tonne, after touching a high of 19,965 yuan, the highest since February 20, 2014. A weaker yen against the dollar also lent support, dealers said.
The dollar hit 115.62 yen JPY= , its loftiest since February, before edging down 0.1 percent to 115.25 yen JPY= late Monday. FRX/ A weaker yen makes yen-denominated assets more affordable when purchased in other currencies.
“Since Shanghai pared some of its earlier gains in late trade, we may see some position adjustments tomorrow.But if Shanghai starts rising again toward 20,000 yuan, the TOCOM may be headed to around 270 yen,” Tazawa said.
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The front-month rubber contract on Singapore’s SICOM exchange for January delivery STFc1 last traded at 187.7 U.S. cents per kg, up 5.6 cents.
($1 = 6.9155 Chinese yuan)
($1 = 115.8800 yen)
(Reporting by Yuka Obayashi; Editing by Subhranshu Sahu)
